Consortium selected for Sellafield

11 July 2008

The view from Sellafield visitor's centre, scene of today's announcement

A 'preferred bidder' has been selected for the management of the UK's enormous Sellafield site. The Nuclear Management Partners consortium will now enter negotiations over the £1.3 billion ($2.5 billion) per year contract.

The NMP consortium, made up of Washington International Holdings, Amec and Areva, beat three other consortia to the selection. Ian Roxburgh, chief executive of the awarding body, the Nuclear Decommissioning Authority, said all the teams had "surpassed the evaluation threshold."

NMP will now enter into what the NDA called a period of contract finalisation, prior to the award of the contract in October. The other bidders will be kept in reserve, NDA said.

If negotiations go well, NMP will create a 'parent body organisation' (PBO) to take on the shares in the 'site licence company' (SLC) for Sellafield. The SLC includes used nuclear fuel reprocessing, mixed-oxide (MOX) nuclear fuel production, and waste storage facilities at Sellafield proper, shut down power reactors at the adjacent Windscale and Calder Hall sites as well as the Capenhurst uranium enrichment site and an engineering and design centre at Risley.

Managing the numerous facilities and their respective operation or decommissioning amounts to £1.3 billion in work each year. The PBO could also earn a £50 million bonus each year, subject to the level of improved performance and efficiency. The initial contract would run for five years, with possible extensions to a maximum of 17 years and a total revenue of about £22 billion.

Roxburgh said the selection of a preferred bidder was a "significant step forward" for the NDA's country-wide program of clean-up and decommissioning. Sellafield represents some of the most complex of NDA's tasks as well as some of its top priorities in terms of hazard and revenue for the ultimate owner, the UK government.

The bidding process, which NDA noted was undertaken in accordance with EU rules, will be reviewed by the NDA in a learning process. Over the next few months, the authority said, it would evaluate the Sellafield process as well as the earlier low-level waste repository process and develop a "way forward" for similar competitions.

The other bidders to be kept in reserve were CH2M Hill, a Fluor-Toshiba partnership, and SBB Nuclear - consisting of Serco, Bechtel and Babcock & Wilcox.

NMP for SMP

A key advantage of the NMP team is thought to have been the presence of Areva, which operates a number of somewhat similar facilities in France, in particular at La Hague. The company would be seen to have great potential to improve performance at the Sellafield MOX Plant (SMP), which has struggled badly to reach economic rates of production. Commissioning began in 2001, but the plant currently produces less than three tonnes of heavy metal product per year, compared to a design target of 120 tonnes per year.